How Does Paying a Liability in Cash Affect the Accounting

question 193

Multiple Choice

How does paying a liability in cash affect the accounting equation?

• A) assets increase; liabilities decrease
• B) assets increase; liabilities increase
• C) assets decrease; liabilities decrease
• D) liabilities decrease; stockholders' equity increases

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Definitions:

Aggression Levels

The degree or intensity of aggressive behaviors or tendencies displayed by an individual.

Parol Evidence Rule

A rule in contract law that prevents the parties to a written contract from presenting extrinsic evidence of terms that would contradict or add to the written agreement.

Express Disclaimer

A clear and unequivocal statement ensuring that certain facts or rights are not implied from a document or statement.

Oral Warranties

Guarantees made verbally about the quality or function of a product, not in written form.